Topic: Government and Politics

Press reports have created the impression that the opioid overdose antidote naloxone is now available over the counter. But in fact, the drug is still classified in the US as prescription only, so states have developed workarounds to make it easier for patients to obtain it without going to a doctor for a prescription. In most states, patients can get naloxone by going up to the counter and asking the pharmacist, who is legally authorized by the state to dispense it.

But some states prohibit third parties from obtaining a prescription for another person, so people in those states who wish to have the antidote available because they have a friend or relative who uses opioids cannot obtain it. And experience shows that many pharmacists choose to not stock naloxone or participate in any distribution program. Furthermore, the stigma now attached to opioid use has deterred many patients from going up to the pharmacy counter and explaining to a pharmacist why they need naloxone.

To get around such obstacles, Australia and Italy have designated naloxone as a truly over-the-counter drug. People can discreetly buy it off the shelf and check out at the cash register.

The Food and Drug Administration is on record since at least 2016 as believing that it is probably appropriate for naloxone to be rescheduled as OTC and has encouraged manufacturers to petition the FDA to that end. Yesterday FDA Commissioner Gottlieb announced the FDA has even gone to the trouble of designing Drug Facts Labels (DFL) required of manufactures for their products to be sold over the counter, and has even tested these labels for “consumer comprehension” in front of focus groups. The Commissioner stated in the announcement that this represents an unprecedented effort to facilitate and speed up the reclassification of naloxone from prescription-only to OTC.

This is commendable. But as I have written here, here, and here, the Commissioner does not have to wait for manufacturers, who may lack the incentive, to request the move to OTC. Under FDA regulations, the FDA can undertake reclassification review at the request of “any interested person,” or the Commissioner himself. States may petition the FDA for reclassification. Finally, if all else fails, Congress can order the reclassification.

The FDA should no longer wait for manufacturers to ask them to make this lifesaving drug more accessible to those in need.

In his State of the City Address, New York mayor Bill de Blasio laid out his governing philosophy succinctly:

Here’s the truth, brothers and sisters, there’s plenty of money in the world. Plenty of money in this city. It’s just in the wrong hands!

The money, of course, is in the hands of those who earned it. In de Blasio’s view, people who earn too much are “the wrong hands.”

In the speech itself and in an interview with Jake Tapper on CNN’s “State of the Union,” he elaborated: the wealthy have too much money because they aren’t taxed enough.

There are whole books on the correct theory of taxation. De Blasio, like many politicians, seems operate on the theory most clearly enunciated in 1990 by Sen. Barbara Mikulski (D, Md.):

Let’s go and get it from those who’ve got it.

There are many theories of taxation, such as Haig-Simons, the Tiebout model, and the Ramsay Principle. But I’d bet that the Mikulski Principle explains actual taxation best. And as “progressives” are feeling their oats, we can expect more politicians and pundits to be asking, “Who’s got the money? Let’s go get it.”

At a press conference earlier this month, California Governor Gavin Newsom announced a new plan to offer 6-months of paid family leave in the Golden State. Despite it being the most generous in the nation, CNN parenting contributor Elissa Strauss felt it’s not enough, saying it’s “so much better than nothing, but leaves room for improvement.” Yet, the Cato 2018 Paid Leave Survey finds that at the national level, Americans are not supportive of establishing a 6-month paid leave program.

The survey found that less than half (48%) support “establishing a new government program to provide 6-months of paid, job-protected, leave to workers after the birth or adoption of a child or to deal with their own or a family members serious illness.” Fifty-percent (50%) oppose establishing a 6-month paid leave program.

Notably, support is low despite the question not mentioning anything about tax increases or other trade-offs that are required when establishing a new government program. As the New York Times rightfully points out, it remains unclear how California will pay for 6-months of paid family leave benefits.

Fortunately, the Cato 2018 Paid Leave Survey asked Americans how much they’d be willing to pay in higher taxes each year to establish a 6-month paid leave program. The survey finds that 66% of Americans would oppose establishing a 6-month paid leave program if it cost them $525 per year in higher taxes, 68% would oppose if it cost $750 a year, and 69% would oppose if it cost $2,100 in higher taxes.[1] These costs are based on using certain program assumptions from the Family Medical Insurance Leave (FAMILY) Act sponsored by Sen. Kirsten Gillibrand (D-NY) and Rep. Rosa DeLauro (D-CT). (See here for more information).

Without mentioning tax increases, majorities of women (54%), mothers of children under 3 (59%), and African Americans (59%) favor creating a 6-month leave program, while majorities of men (58%) and whites (54%) would oppose. Latinos are evenly divided with 49% in support and 45% opposed. But, each of these groups opposes a 6-month program once taxes are mentioned. Majorities oppose among women (64%), men (67%), mothers of children under 3 (54%), whites (71%), Latinos (58%), and African Americans (51%) if a 6-month paid leave program cost $525 a year in higher taxes.

Some could reasonably point out that California is more liberal than the rest of the country, with California voting Democratic in 7 of the past 10 presidential elections. To consider how Democratic-leaning Californians might feel about increasing their taxes to pay for a 6-month paid leave program, we can examine what Democrats nationally think about it:

When no taxes are mentioned 61% of Democrats support establishing a 6-month paid leave program and 38% are opposed. This includes 67% of Democratic women and 55% of Democratic men. (In contrast, 70% of Republicans oppose, including 64% of Republican women and 76% of Republican men). However, Democratic support flips as soon as tax increases are mentioned. If the 6-month program cost people $525 a year in higher taxes, 55% of Democrats would oppose the program and 44% would favor. If costs turned out to be higher, 67% of Democrats would oppose if the program cost them $750 a year in higher taxes and 71% would oppose if it cost them $2,100 a year in higher taxes. Furthermore, majorities of both Democratic women and men oppose a 6-month paid leave program once costs are considered.

These results suggest that if California voters more closely resemble national Democratic voters rather than the nation as a whole, they would like the program in theory but not in practice. While they may desire to offer a 6-month paid family leave benefit to people, they would not tolerate the higher taxes likely required to properly fund the program.

California already has the highest income tax rates in the country, reaching up to 13.30%, with the average family paying 9.30%, and a statewide sales tax rate of 7.25% percent in addition to local sales tax rates. Especially given these conditions, it remains uncertain voters would be willing to tolerate another tax increase. One option to keep costs low could be to means-test the program so that only the needy would receive benefits. Otherwise, the program may be too expensive for voters to accept. Another option is to promote tax-advantaged savings accounts. Eighty-two percent (82%) of Democrats, as well as 78% of all Americans, would support creating tax-advantaged family leave savings accounts that could be used if people needed to take family or medical leave.

Altogether, these results indicate that while Californians may be excited about the benefits that this new program would offer, they are likely to resist the higher taxes likely required to make the program possible.

The Cato Institute 2018 Paid Leave survey was designed and conducted by the Cato Institute in collaboration with YouGov. YouGov collected responses online during October 1-4, 2018 from a national sample of 1,700 Americans 18 years of age and older. Restrictions are put in place to ensure that only the people selected and contacted by YouGov are allowed to participate. The margin of error for the survey is +/- 2.4 percentage points at the 95% level of confidence.

[1]Public support doesn’t change much after taxes reach $525 a year perhaps because Americans aren’t supportive of the program to begin with. After taxes are mentioned there may be a threshold after which cost-conscious people will be opposed. Those who remain in support even if the costs rose to $2,100 a year may be very ideologically committed to establishing a program, they think someone else will foot the bill, or they may not believe taxes would actually be raised that much.

The new Democratic majority in the House of Representatives has introduced H.R. 1, a bill with two public financing components: one a pilot program for vouchers, and the other a conventional if generous subsidy program for small donations. I focus here on the latter.

Public financing schemes have often focused on encouraging small donors in part to allegedly counter the influence of “Big Money.” The financing of campaigns by taxpayers fits easily into a number of dichotomies that structure our public discourse: small/large, vulnerable/powerful, poor/rich, left/right, and of course, friend/enemy. The realities are less exciting and persuasive than the rhetoric.

In that respect, this bill is entirely predictable in a highly partisan time. The government subsidy is six times the sum raised by small donations. A new majority is thus proposing a $9.6 billion (yes, billion) subsidy for its congressional candidates in the 2020 election. All things being equal, that would be a massive advantage for the party in that election.

But things need not be equal. Such a huge subsidy would encourage the GOP to find small donors. Maybe “ActRed” would ready for 2020 and enjoy equal success. That’s not likely but let’s assume it is for purposes of argument.

Where would the billions needed to finance this program come from? The funding would involve new taxes or borrowing since it is new spending. So either current or future taxpayers would finance the program.

Here’s one problem: the government would be using its power of coercion to force people to support candidates and parties they do not support (indeed, to support people they don’t want their children to marry). This coercion would happen more to Republicans than Democrats at first, but Republicans might get better at claiming the subsidies over time. We would end up with the government coercing everyone without regard to partisan commitments.

Advocates of taxpayer financing also might think the scheme takes the side of “the people” (small donors) against the elite (current donors). ActBlue reports they had 4.9 million unique donors in 2018. That’s a large absolute number. But it constitutes about 3 percent of eligible voters in the United States. These ActBlue contributors are not average Americans. ActBlue donors are also a small portion of liberals in America. In 2016, about 26 percent of the nation identified as liberal or about 47 million people. Hence ActBlue got money from just over 10 percent of liberals. By any measure, ActBlue donors are a political elite. No doubt they are a political elite that believes their policy views represent what’s good for the nation and the average American. But they are not average Americans.

Finally, this bill asks taxpayers to provide the parties with large sums for their campaigns. But ActBlue showed that the small donor elite can be mobilized, and Republicans have every incentive to match ActBlue’s success. Given that private political entities are doing well with small donors, why should the taxpayer be forced to support candidates and parties they do not want to support? Don’t taxpayers have better uses for $20 billion?

Last Friday, President Trump threatened to declare a national emergency and build his border wall using “the military version of eminent domain.” By Tuesday, Trump seemed to have climbed down somewhat, declining to repeat the threat in his televised Oval Office address. But the week’s end found the president declaring it would be “very surprising” if he didn’t pull the trigger.

So is the emergency-powers gambit a live option or—like the executive order revoking birthright citizenship Trump floated before the midterms—another pump-fake designed to thrill the base and rile the media? Either way, it’s a noxious, thuggish proposal. Using the army to do an end-run around Congress is not how constitutional government is supposed to work. Imagine believing that Latin American immigration so threatens our free institutions that only banana republic tactics can protect us.

About the best one can say for the idea is that it has the accidental virtue of concentrating the mind wonderfully about the powers we’ve concentrated in the executive branch.

Our Constitution cedes vanishingly few emergency powers to the president. He commands “the Militia of the several States, when called into the actual Service of the United States,” and has the power, via Article II, section 3, to convene Congress on “extraordinary Occasions,” such as a national emergency. “That is about as far as his crisis authorities go,” notes the University of Virginia’s Saikrishna Prakash: “the convening authority would have been unnecessary if the chief executive could take all actions necessary to manage ‘extraordinary occasions.’”

In Youngstown, the 1952 “steel seizure” case, the Supreme Court rebuffed the Truman administration’s claim of a general presidential emergency power divorced from specific statutory or constitutional authority. Justice Jackson, in his influential concurrence, suggested that the Framers neglected to provide such authority for fear “that emergency powers would tend to kindle emergencies.”

Overbroad delegations of emergency authority to the executive are a longstanding problem. During the Watergate-era congressional resurgence, a 1974 Senate special committee investigation (co-chaired by Frank Church of Church Committee fame) identified 470 provisions of federal law delegating emergency powers to the president and four proclamations of national emergency, dating as far back as 1933, then still in effect. That investigation led to the National Emergencies Act of 1976, which repealed existing emergency declarations, required the president to formally declare any claimed national emergency and specify the statutory authority invoked, and subjected new declarations to a one-year sunset unless renewed.

Despite those efforts, the U.S. Code today remains honeycombed with overbroad delegations of emergency power to the executive branch. A Brennan Center report released last month identifies 136 statutory powers the president can invoke in a declared national emergency. Few of these provisions require anything more than the president’s signature on the emergency declaration to trigger his new powers—“stroke of the pen, law of the land—kinda cool,” in the Clinton-era phrase.

Most of these emergency powers have never been invoked, many of them are innocuous, and some—like the provision that allows suspension of the Davis-Bacon Act in a natural disaster—are even sensible. But other long-dormant powers are extraordinarily dangerous.

Writing in the Atlantic, the Brennan Center’s Elizabeth Goitein highlights a WWII-era amendment to the Communications Act of 1934 empowering the president to close or take over “‘any facility or station for wire communication’ upon his proclamation ‘that there exists a state or threat of war involving the United States.’” She sketches a nightmare scenario in which Trump puts the country on a war footing with Iran; invokes § 706 of the Communications Act to assume control of U.S. internet traffic, deploys federal troops to put down the resulting unrest, and scares people away from the polling stations with a menacing Presidential Alert text message. Goitein grants that “this scenario might sound extreme,” and I admit I found it a bit overcooked. Even if the administration wanted to do something like this, I’m confident it would go bust, thanks to the sort of spectacular ineptitude that botched the initial rollout of the Travel Ban.

However, she’s absolutely right to call on Congress to “shore up the guardrails of liberal democracy” with comprehensive reform of emergency powers. “Committees in the House could begin this process now,” she writes, “by undertaking a thorough review of existing emergency powers and declarations,” laying out a roadmap for repealing unnecessary delegations, and providing “stronger protections for abuse.” The sooner, the better: you never know when a competent authoritarian is going to come along.

With nine departments and multiple agencies closed, maybe for months, the New York Times columnist and Nobel laureate envisages a coming test of whether the country can live without the Food and Drug Administration, the Small Business Administration and farm subsidies.

So are those of us at Cato who believe in the abolition of these programs celebrating? Not quite.

As the vast majority of the U.S. population go about their daily lives, barely noticing that 25 percent of federal discretionary spending has been paused, it’s certainly possible many will wonder why debt is being racked up for programs that have no noticeable effect on their well-being. Who knows, many employees, businesses and farms may also reconsider the wisdom of placing their livelihoods at the whims of the political process.

Better still, the shutdown may bring attention to these otherwise rarely-scrutinized programs. If major columnists continue identifying Cato as proponents of scrapping things such as farm subsidies and small business cronyism, linking to our research on the damaging economic, political, and social consequences of existing provisions, the shutdown could serve a useful public education role too!

Markets are powerful precisely because they allow people to interact in voluntary ways to fulfil wants and needs. Necessity, as they say, is the mother of invention.

Libertarians are indeed confident that, as in countries such as New Zealand, scrapping agricultural subsidies would deliver a more efficient industry, taxpayer savings, and a bigger economy.

But it’s obvious, as Krugman acknowledges, that temporary suspension of promised support is not an environment conducive to farmers making long-term crop or farm ownership decisions, private companies banding to form market-based food safety certification agencies, or small businesses sourcing new finance.

Yes, economic actors will take steps to mitigate the effects of disruption. But knowing government will eventually reopen, there is little to no incentive for the new institutions to develop or businesses and farms to undertake the structural change we would see if government absented from these roles. Instead, businesses and individuals are temporarily crippled in their forward planning and paralyzed by the uncertainty promises made to them being broken.

The natural priority for those farms, businesses and federal employees right now is to lobby successfully for the government to reopen and their payments to start flowing again. Hence the newspaper stories we see already about their difficulties, indicating precisely the diffuse costs yet concentrated benefits associated with much government spending.

That doesn’t mean libertarians are any less supportive of removing government from these activities. In fact, as Chris Edwards shows, a host of other areas likely to be noticeably affected by a sustained shutdown – security screening at airports, air traffic control, and the management of national parks – are better managed in other countries with more private sector involvement. If the shutdown brings attention to this, then great.

Overall though, libertarians are fully aware that for the real policy experiments we desire, the public and/or politicians must be convinced of the necessity or desirability for permanent policy change in a market-based direction. The best chance for success with that is in an environment where those affected can adjust in an orderly manner, and replacement private-sector institutions have time to develop.

Krugman knows it is disingenuous to suggest that the current chaos is some libertarian policy experiment. But as some Republicans do make the case that the programs above are vital for the health of the economy, and libertarians continue to make the case for their abolition, perhaps he will finally cease lumping Republicans and libertarians together in his columns.

IN THE name of securing the border and keeping out illegal immigrants, President Trump has opted for a partial government shutdown. Irony of ironies, that shutdown has paralyzed the nation’s immigration courts, shuttering many of them and allowing several hundred undocumented immigrants to dodge deportation orders each day the shutdown continues. They are among many hundreds of others whose cases will be postponed for years — or, in effect, indefinitely — for every day the closure lasts.